Plans to restrict profit making in the care of looked-after children cleared the first hurdle in the Senedd amid concerns about unintended consequences.

Senedd members voted to agree to the principles of the health and social care bill, which aims to restrict private profit, but warned of “huge risks” in practical terms.

Dawn Bowden, Wales’ social care minister, cautioned that the cost of caring for looked-after children has increased from £60m a decade ago to around £200m today.

“If we carry on that trajectory, we will be looking at a bill for local authorities of around £1bn in the next ten years,” she said, stressing that doing nothing is not an option.

Ms Bowden added: “We don't want to see children treated as commodities in the care sector; we want to see investment in the care of our looked-after children.”

Russell George, who chairs the Senedd’s health committee, called for investment beyond the £68m the Welsh Government has already committed to the policy.

He said the cost of caring for looked-after children has risen dramatically in the past decade, which seems unsustainable with councils already facing enormous pressures.

“Although we are grateful for the clarification, this approach is simply not good enough,” said the committee chair.

Altaf Hussain said the bill has admirable intentions but warned of unintended consequences.

“This bill could lead to a huge decline in the care of looked-after children,” he said.

Dr Hussain told the Senedd seven councils in Wales provide no care at all, “so the private sector is the only game in town”, as he criticised ministers for “demonising” providers.

Mike Hedges, who chairs the legislation committee, was concerned that details of the bill’s impact on key issues like human rights were not published in time for scrutiny.

“The lack of timely information from the government was a theme of our findings,” he said.

Following the October 22 debate, Senedd members backed the bill, 37-14, with Labour, Plaid Cymru and Ms Dodds in favour while the Conservatives voted against.

The bill now moves on to the second of four stages in the Senedd law-making process, which will see the health committee consider detailed amendments.